Re-Elected Obama Has No Reason to Block Keystone Pipeline

Nov. 14 (Bloomberg) -- Environmentalists who are against
building the Keystone XL oil pipeline from Alberta, Canada, to
the U.S. Gulf Coast, have called a march on Washington this
weekend to demand that President Barack Obama again reject it.

This time, it is the opponents the president should turn
down. He should move to get the 1,700-mile, $7 billion
underground pipeline approved within the next couple of months.

When Obama denied a permit for Keystone XL in January, it
was because the builder, TransCanada Corp., needed to revise the
route to avoid Nebraska’s Sandhills region overlying the
Ogallala Aquifer. Rather than wait for this essential revision,
Republicans in Congress forced the president to make a quick
decision on TransCanada’s entire application, in the hope his
rejecting it would hurt him in the election.

Since then, the company has rerouted and, in May, submitted
a new application with the U.S. State Department. (The State
Department is involved because the pipeline would cross the
U.S.-Canada border.) Environmental studies have been updated
accordingly, on what was already one of the most-researched
infrastructure projects in U.S. history. And now Obama has won
re-election, removing any need to pretend the pipeline’s
surpassing value to U.S. energy security is undermined by its
environmental risks.

More Emissions

The pipeline itself would be at least as safe as any of the
thousands of miles of pipelines that carry crude oil, liquefied
petroleum gases and natural gas across the U.S. But then,
opponents don’t really object to the pipeline itself. What they
want is to slow or stop altogether exploitation of the
Athabascan oil sands in Alberta.

It’s true that extracting and refining bitumen from the
sticky black sands emits significantly more carbon dioxide and
other greenhouse gases than does drilling and processing
ordinary oil. Yet in the well-to-wheels life cycle of the oil,
its emissions are only about 17 percent greater (or even less) -
- because most of oil’s emissions come from use. What’s more,
oil-sands producers are working to reduce per-barrel emissions,
for example by generating electricity as a byproduct of oil
extraction.

In September, Royal Dutch Shell Plc announced it would
begin carbon capture and storage at the oil sands by 2015.

The environmental side effects are real, in other words,
but acceptable -- with careful monitoring and continued efforts
to minimize them. Consider that Canada is the U.S.’s biggest and
most reliable seller of crude, and that the Athabascan oil sands
are the third largest proven oil reserves on Earth, already
producing about 2 million barrels a day and expected to supply
3.3 million by 2020. That’s enough to help make North America
largely energy-independent.

The Keystone XL pipeline would carry 700,000 barrels of oil
a day to refineries in Oklahoma and Texas. Not building it would
keep the fuel from reaching the U.S., but it wouldn’t shut down
oil-sands extraction altogether. TransCanada can be expected to
push back hard against efforts in Canada to block the
construction of the so-called Gateway Pipeline, which would
carry bitumen from the oil sands west to British Columbia, where
it could be loaded on tanker ships bound for China.

The bitumen is coming out of the ground one way or another.
Obama should ensure it goes to the U.S. and not the Far East.
The administration has long said it would make a decision by the
first quarter of 2013. We see no reason it shouldn’t do so
before the end of the year.

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